Yelp Introduces Free Restaurant Reservations

Yelp is getting deeper into transactions. One manifestation of this is restaurant reservations. In July of 2013, Yelp bought reservations provider SeatMe. Today, it’s announcing free restaurant reservations:

Business owners can set up the free Yelp Reservations capability through their Yelp Business Owners Account and start filling tables with the millions of people that come to Yelp looking for a great business to try. Consumers can book straight from the Yelp business listing on mobile or desktop and get a text message reminder, as well as the option to cancel or change a reservation by text. A free widget is also available for businesses to add to their own websites to encourage visitors to book a reservation for their restaurant and attract valuable new business.

It’s not clear what features business owners will get through the new system. SeatMe isn’t free, so it presumably offers more functionality than the free version. Yelp appears to be positioning this for smaller or new restaurants.

There are two objectives in all likelihood: get restaurants into the system and later upsell SeatMe and/or provide additional incentives to sign up for a business owner account, which may later lead to an advertising relationship.

Some people are contending this is Yelp directly taking on OpenTable. I don’t agree.

Yelp continues to offer OpenTable on its site. This is really not about entering or disrupting OpenTable’s business so much as it is Yelp creating more value for business owners and establishing deeper ties with them.

As I’ve argued elsewhere, transactions are a key to Yelp’s future. They help more directly align Yelp and business owner interests — and potentially solve some of the site’s current problems and challenges associated with review legitimacy.